Deadline for federal approval of Cabela’s buyout fast approaching

cabelas background check

The Federal Reserve has until October 3 to approve a $5 billion merger between Bass Pro Shops and Cabela’s. (Photo: Columbus Dispatch)

Federal regulators have six weeks left to approve the consumer credit side of a pending merger between Bass Pro Shops and Cabela’s — otherwise investors worry the multi-billion dollar deal could fall through.

Bass Pro Shops bought Cabela’s in October for $5.5 billion, or $65.50 per share. Later the Missouri-based sporting goods chain restructured the deal for a lower share price of $61.50.

After Cabela’s weak second quarter sales, however, investor analysts say the retailer could be desperate to close the deal, while Bass Pro Shops may see its former competitor’s tumbling stock as a cost-saving opportunity.

“If Bass Pro doesn’t own Cabela’s by the October deadline, they should walk away,” Nathan Yates, an analyst following Cabela’s with Forward View Consulting in Virginia, told the North Platte Telegraph Thursday. “If it doesn’t walk away, then they’re going to demand a lower sales price.”

The Federal Reserve’s Oct. 3 deadline looms large over the merger, according to the newspaper. Hanging in the balance is the approval of the sale of Cabela’s consumer credit financing arm — World’s Foremost Bank — to a Georgia financial institution, Synovus Financial Corp, who will subsequently transfer accounts to Capital One.

John Maysles, an analyst with Elevation Securities, told the newspaper “it just takes time” to secure regulatory approval.

Meanwhile, the Nebraska-based Cabela’s watches share prices plummet amid ever-weakening quarterly earnings reports.

“Merchandise sales were challenging in the second quarter,” said Tommy Millner, Cabela’s chief executive officer, earlier this month. “Since the fall election, we have continued to see a slowdown in firearms and shooting related categories. This slowdown was even more pronounced in the second quarter due to the impact of inventory liquidation by a major competitor who has filed for bankruptcy as well as the anniversary of a number of events from a year ago, including the Orlando tragedy in June of 2016.”

The retailer reported a 9.7 percent decrease in second quarter same store sales, as Internet and brick and mortar profits dipped 3.9 percent and 6.7 percent, respectively. Net income plummeted nearly 25 percent over 2016.

Millner placed the blame for the company’s disappointing numbers on Gander Mountain’s ongoing liquidation.

Gander Mountain filed for Chapter 11 bankruptcy protections in Minnesota court on March 10. Camping World, the nation’s largest recreational vehicle dealer, led the investor group that bought out $390 million worth of Gander Mountain assets, including its Overtons boating business, during an April 28 auction. CEO Marcus Lemonis said a separate liquidation company bought the store inventory currently on sale across the country.

Lemonis will close more than half of the chain’s 162 locations and rename the surviving stores Gander Outdoors as he attempts to fix years of “undisciplined inventory buying,” including $100 million wasted on a “bad assortment of guns.” The retailer announced this month four new brands will join its realigned product offerings: Henry Repeating Arms, Crosman, Pulsar Night Vision and Sight Mark.

Read More On:

Latest Reviews

  • Springfield SAINT: Your High-Value AR-15

    The Springfield Armory SAINT offers a high-value, no-frills-required AR-15 platform. We put it through its paces to see if it's worth adding to your collection. After several trips to the range, we can confirm this is a great gun.

    Read More
  • The Sig Sauer P320 X5 Legion is an Amazing Pistol

    The Sig Sauer p320 X5 Legion has been on the market for a little while now. So I wanted to bring you a review after shooting more than 30,000 rounds through mine over a year of competing in 3-gun and USPSA.

    Read More
  • 17 Reasons to Love the Glock 17

    Glock 17s are trusted by law enforcement and militaries around the world. But they are also great guns for civilians. Here are our top 17 reasons to get a Glock 17.

    Read More
  • Sig P320 vs. Sig P365 for Concealed Carry

    Sig’s P365 and P320 offer two great options for concealed carry. Their compact sizes and high magazine capacities make them excellent choices for everyday carry. They're also easy to customize.

    Read More